If there’s one hurdle the majority of nonprofit organizations (NPOs) continue to struggle with, it’s the persistent absence of a comprehensive fundraising strategy. The default approach to fundraising for NPOs has remained focused on how everyone else does it. And there’s the problem. Because nearly everyone else is using the same limited set of tools.
Complicating the picture, donor acquisition, conversion, and retention rates are at all-time lows. Recruiting and retaining talented staff members, building an effective board of directors, and investing in the right technology tools put nonprofits under more pressure than ever.
But by not employing a strategic fundraising playbook, nonprofits are leaving an estimated $36 billion in potential donations untapped. It’s no surprise to see this confirmed in the 2021 Nonprofit Leadership Impact Study, released by the nonprofit management and strategy firm NonProfitPRO. The report says NPOs aren’t putting sufficient effort into developing strategic plans. Unchanged from last year, 55% of nonprofits fail to outline in-depth strategic plans for fundraising initiatives at the start of each fiscal year.
Nonprofits need to see giving from the donor’s perspective. For-profit businesses excel at this, leveraging data-driven insights to create an authentic “brand experience” that rewards loyalty and leads to retained relationships. Today’s nonprofits have an opportunity to put the same playbook approach to work for themselves, to create an overall donor experience, fostering a new level of sustainable, recurring giving.
It’s impossible to establish trust with today’s consumers without a consistent brand presence, across all channels, all touchpoints, and communications. This goes for nonprofits as well, but it’s not how most nonprofits approach their mission. Asking for donations once a year with emails or phone calls, without leveraging the crucial insights available with a data-driven, personalized approach, only perpetuates the status quo.
The single, most important factor is the absence of smart, effective fundraising “plays.” When drawn from a larger strategic plan, fundraising plays go to the heart of creating a rich, consistently relevant donor relationship.
At the heart of a strategic fundraising plan is the “donor experience.” The fact is, today’s donor wants to connect to, and be part of, a consistent experience across all points of giving. They want to feel connected to the causes they support, see the impact they’re having, and they want the process to be intuitive and easy. The numbers speak for themselves: from a long-term perspective, a 10% improvement in donor retention translates into a 200% leap in donor lifetime value.
We don’t have to look far to see successful examples that are grounded in a strategic marketing plan of some kind. The first thing you notice about these plays is a disciplined focus on the customer and the customer experience.
Case in point: Uber Eats, the food-delivery branch of Uber. Having established a clear picture of its value proposition and its position in the food market, Uber Eats deploys a level of personalization that, over time, fuels customer loyalty and drives recurring business.
Everything about Uber Eats is aimed at constant learning. Learning things like how frequently a particular customer tends to place an order, what time of day or night, how much they typically spend, among other insights. In so doing, Uber Eats has rapidly evolved from a transactional experience to creating relationships.
Uber Eats is committed to learning not how a customer fits into its marketing plan, but how Uber Eats can fit into that customer’s plans. They know better data leads to better food and service, which means better business.
As you might expect, Uber Eats’ marketing strategy is focused purely on customer data. Its data-driven focus places the burger before the restaurant. Combing through its customer's data, looking at past order history to find common trends in buying behavior, it then applies that knowledge to all its interactions with that customer. This ensures that the same customer will be more inclined to act on messages from Uber Eats because it’s the right message arriving at the right time.
For NPOs, creating a sustainable giving loop starts with establishing a strategic approach as the basis for an effective fundraising playbook. The success of for-profits in doing this well and consistently can be a source of inspiration for NPOs in today’s world.